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Judgment
S.N.H. Zaidi, J
The instant appeal has been directed against the order dated 5.6.2012 of the DRT I-Delhi whereby application I.A. No. 438/2012 filed by defendant No. 1 in O.A. No. 57/2008 for the amendment of the counter-claim taking the amended counter claim on record, has been dismissed. Briefly stated the facts giving rise to this appeal are that a loan of Rs. 9.25 crores was granted to the appellant company by a consortium of creditors comprising ICICI Bank and IFCI. As the appellant company could not repay the loan as per the repayment schedule, it referred the matter to BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985 where the liability of the company was fixed at Rs. 11.78 crores and a revival package was prepared and the ICICI Bank was appointed as Operating Agency but the appellant company again failed to repay the entire amount of loan. Thereafter the ICICI Bank assigned as debt to Kotak Mahindra Bank whereas IFCI assigned the debt to the respondent No. 1 Company. The assignee company filed O.A. No. 57/2008 against the appellant for the recovery company filed O.A. No. 57/2008 against the appellant for the recovery of about Rs. 130 crores wherein, on 1.4.2009, the appellant filed a counter-claim of Rs. 50 lacs for the loss damages and expenses spent on various litigations up to that date along with its written statement. On 30.5.2012 the appellant filed an application (I.A. 438/2012) the amendment of the counter-claim/taking the amended counter claim on record raising the counter-claim to more than Rs. 500 crores. The learned DRT, after hearing the parties dismissed that application by the impugned order hence this appeal.
Mr. Sunil learned Counsel appearing for the appellant, pointed out that it was pleaded in the written statement that the defendant/appellant had suffered loss and damages due to the malicious attitude and conduct of the applicant/respondent No. 1 and had spent a huge sum on various litigations filed by the applicant and accordingly a counter-claim for Rs. 50 lacs was set up as compensation. He has submitted that subsequent to the filling of the written statement it was realised that several types of losses and damages suffered due to the acts and omissions of the applicant, other creditors and their officials could not be claimed and hence a need had arisen to amend/supplement the counter-claim. It is also pointed out by Mr. Goel that since the counter-claim as originally filed, was not in proper formal therefore an amended counter-claim in proper format was also filed with the application and requisite fee was also deposited for the amended counter-claim. According to him, the amended counter-claim is necessary for the purposes of determining the real controversy in question between the parties.
Relying upon various judicial pronouncements, Mr. Goel contended that despite due diligence the fee on the counter-claim as required by Rule 7 of the Debts Recovery Tribunal (Procedure) Rules, 1993 (for short, the Rules of 1993) could not be remitted but since the rule of procedure is always subservient to and in aid of justice and an important right has been conferred upon the defendant to seek counter-claim under Section 19(8) of the RDDEFI Act, therefore, non-payment of fee should not come in the way of exercising the valuable right of counter-claim R.N. Jadi and Brothers & Ors. v. Subhaschandra, : VII (2007) SLT 24; Rajendra Prasad Gupta v. Prakash Chandra Mishra & Ors., : V (2011) SLT 134 : : III (2011) CLT 82 (SC) : : AIR 2011 SC 1137; Jai Jai Ram Monohar Lal v. National Building Material, Supply, Gurgaon, : AIR 1969 SC 1267.
Mr. Goel further contended that the delay in seeking the amendment of the counter-claim cannot be a ground for dismissed of the application by applying a hyper-technical approach and it should have been allowed as the amendment was sub-serving the cause of justice and was necessary for the purpose of determining the real question in controversy and was not working injustice to the applicant S. Nagraj v. State of Karnataka, (1998) Supp. (4) SCC 1250; M/s. Estralla Rubber v. Dass Estate (Pvt.) Ltd., : VI (2001) SLT 577 : : AIR 2001 SC 3295; Pankaja & Anr. v. Yellappa (D) by L.Rs. & Ors., : V (2004) SLT 30 : : III (2004) CLT 147 (SC) : : AIR 2004 SC 4102; Pirgonda Hongonda Patil v. K. Kalgonda Shidgonda Patil & Ors., : AIR 1957 SC 363 and Usha Devi v. Rijwan Ahmad & Ors., : AIR 2008 SC 1147.
Mr. Goel has also placed reliance upon the observation of the Delhi High Court in Prominent Advertising Services v. A.B. Communications & Ors., : 161 (2009) DLT 378 : : 2009 (110) DRJ 542, wherein it has been held that non-payment of Court fee or payment of deficient court fee along with the counter-claim cannot be a ground for rejection of the amendment of counter claim, in support of his contention. He further contended that by the amended counter-claim no new or additional cause of action has been constituted and it only seeks to elaborate the facts which are already on record and as such the amended counter-claim could have been taken even after the expiry of the statutory period of limitation, Sabhari Syndicate v. Catholic Syrian Bank Ltd., : AIR 2001 (2) Kerala 133.
Mr. S.L. Gupta, learned Counsel for the applicant/respondent No. 1 on the other hand, submitted that, under Section 19(8) of the RDDBFI Act, against the claim of the applicant a counter-claim can be set up by a defendant in a written statement, subject to payment of the requisite fee as per Rule 7 of the Rules of 1993 and the payment of fee is a condition precedent for entertaining a counter-claim. According to him, since the defendant/appellant did not pay the required fee, as per the said rule, and the applicant/respondent was not called for to file any written statement to answer the counter-claim as per Section 19(10) of the said Act, therefore, the counter-claim of the defendant-appellant is not a lawful counter-claim and as such no amendment can be allowed to the said counter-claim Mr. Gupta further contended that by seeking to take the amended counter-claim through the application (I.A. 438/2012), the defendant/appellant had in fact intended to file a fresh counter claim, which was not permissible under the law, as a counter claim could only be set up along with a written statement, which was filed in 2009.
Mr. Gupta relying upon the case of Nahar Industrial Enterprises Limited v. Hong Kong and Shanghai Banking Corporation, : III (2009) BC 539 (SC) : : V (2009) SLT 737 : : (2009) 8 SCC 646, has contended that as the DRT is not a civil Court, therefore the provisions of the CPC, including Order 6 Rule 17 thereof relating to the amendment of pleadings are not applicable to the proceedings under the RDDBFI Act. He also referred to Section 22(1) of the RDDBFI Act which provides that the DRT or the Appellate Tribunal shall not be bound by the procedure laid down by the CPC and, as such, according to him, the case law referred to/relied upon by the appellant's Counsel have no application to the matter in question,
Mr. Gupta further submitted that after the written statement of the defendant/appellant was filed on 1.4.2009, the applicant/respondent No. 1 filed its evidence on 19.3.2010 but since thereafter the defendant appellant did not file its evidence for a longtime only to delay the disposed of the OA and ultimately filed its evidence on 29.5.2012. According to him, the application (I.A. 438/2012) has been filed by the defendant/appellant with the sole purpose of delaying the disposal of the O.A., which is at the stage of final disposal and as such the Tribunal below has rightly dismissed the same Mr. Gupta has relied upon the judgment of the Delhi High Court rendered in M/s. Shoes East Ltd. & Ors. v. Debts Recovery Appellate Tribunal and Anr., : I (2001) BC 426 : in support of his contention.
I have considered the submissions of the parties Counsel and perused the record.
The defendant/appellant had set up a set-off/counter claim at page Nos. 77 and 78 of its written statement filed on 1.4.2009 alleging that the defendant had suffered losses and damages and spent a sum of about Rs. 50 lacs in three litigations, including the present O.A., and had prayed for the acceptance of the counter-claim/set-off. The provisions relating to set-off and counter-claim are enshrined in Sub-sections (6) to (11) of Section 19 of the RDDBFI Act, which provide as under:
(6) Where the defendant claims to set-off against the applicant's demand any ascertained sum of money legally recoverable by him from such applicant, the defendant may, at the first hearing of the application, but not afterwards unless permitted by the Tribunal, present a written statement containing the particulars of the debt sought to be set-off.
(7) The written statement shall have the same effect as a plaint in 4 cross-suit so as to enable the Tribunal to pass a final order in respect both of the original claim and of the set-off.
(8) A defendant in an application may, in addition to his right of pleading a set-off under Sub-section (6) set up, by way of counter-claim against the claim of the applicant, any right or claim in respect of a cause of action according to the defendant against the applicant either before or after the filing of the application against the before the defendant has delivered his defence or before the time limited for delivering his defence has expired whether such counter-claim is in the nature of a claim for damages or not.
(9) A counter-claim under Sub-section (8) shall have the same effect as a cross-suit so as to enable the Tribunal to pass a final order on the same application both on the original claim and on the counter-claim.
(10) The applicant shall be at liberty to file a written statement in answer to the counter-claim of the defendant within such period as may be fixed by the Tribunal.
(11) Where a defendant sets up a counter-claim and the applicant contends that the claim thereby ought not to be disposal of by way of counter-claim but in an independent action, the applicant may at any time before issues are settled in relation to the counter-claim apply to the Tribunal for an order that such counter-claim may be excluded, and the Tribunal may on the hearing of such application, make such order as it thinks fit.
A perusal of the above provisions shows that a set-off of an ascertained sum of money can be claimed by the defendant against the applicant's demand in a written statement containing the particulars of the debt sought to be set-off and the said written statement shall have the effect of a plain in a cross-suit so as to enable the Tribunal to pass final order in respect of both the original claim and the set-off. The defendant in addition to the claim of set-off, may also set up a counter-claim in respect of a cause of action accrued to him against the applicant either before or after the filing of the application but not later than the delivery of his defence, whether or not such counter-claim is in the nature of a claim or after the filing of the application but not later than the delivery of his defence whether or not such counter-claim shall also have the same effect as a cross-suit like that in the matter of set-off. The applicant is required to file the written statement in answer to the counter-claim within the period fixed by the Tribunal, but if the applicant contends that the claim be disposal of as an independent action and not by way of counterclaim, he may, before the settlement of the issues in relation to the counter-claim, apply to the Tribunal for an order to that effect and the Tribunal may make an order on such application as it thinks fit.
In the instant case, the defence was delivered through the written statement on 1.4.2009 and as per the averments made at Page Nos. 77 and 78 thereof, the cause of action for the counter-claim of Rs. 50 lacs had accrued to the defendant up to that date. There is no dispute in respect of the fact that the counter-claim was not accompanied by the fee as per Rule 7 of the Rules of 1993. The counter claim was, therefore, not made by the defendant/appellant in accordance with the said rules. A perusal of the application I.A. 438/2012 would show that the defendant appellant that sought that page Nos. 77 and 78 of the written statement, which contain the counter claim be substituted replaced by the amended counter claim filed along with that application in the amended counter claim, which was into about 60 pages the defendant/appellant has claimed an amount of Rs. 500,04,51,264/- not only against applicant/respondent No. 1 and defendants/respondents 2 to 5, but also against its higher officials though they were not the parties to the O.A. The amended counter claim also contains three calculation-sheets of the said amount of counter claim. According to those calculation-sheets the defendant/appellant is seeking Rs. 63,25,998/- towards loss of operation. Rs. 36,50,18,893/- towards business opportunity loss and Rs. 3,98,18,05.373/- towards loss of reputation and brand value. The written statement filed by the defendant/appellant does not show the accrual of any cause of action to the defendant/appellant in respect of either loss of operation or loss of business opportunity or loss of reputation and brand value before the delivery of defence. The averment of the defendant/appellant in paragraph 5 of application (I.A. No. 438/2012) that through the counter claim was raised in April 2009 but it could not be amended earlier despite due diligence because during the continuation of the proceedings in the last two years, further events and developments had taken place due to the conduct of the lenders and their assignees, including payment of Rs. 5 crores in the Punjab and Haryana High Court in 2011, clearly shows that the cause of action for the amendment of counter claim had accrued subsequent to the delivery of defence. I am, therefore, of the view that the claim in respect of about Rs. 500 crores, as has been set up through the amended counter claim, is against the mandate of Section 19(3) of the RDDBFI Act, which cannot be accepted.
The Hon'ble Supreme Court in the case of Nahar Industrial Enterprises Limited v. Hong Kong and Shanghai Banking Corporation (supra) while considering the question whether the High Court of the Supreme Court has the power to transfer a suit pending in a Civil Court situated in one State to a DRT situated in another state, has also considered whether or not DRT is a Civil Court? The Apex Court in Paragraphs 85 to 89 of the said judgment has held thus:
If the Tribunal was to be treated to be a Civil Court, the debtor or even a third party must have an independent right to approach it without having to wait for the Bank or Financial Institution to approach it First. The continuance of its counter-claim is entirely dependent on the continuance of the applications filed by the Bank. Before it no declarations relief can be sought for by the debtor. It is true that claim for damages would be maintainable but the same have been provided by way of extending the right of counter-claim.
The Debts Recovery Tribunal cannot pass a decree. It can issue only recovery certificates (see Sections 19(2) and 19(22) of the Act). The power of the Tribunal to grant interim order is attenuated with circumspection. (See Dataware Design Labs (P) Ltd. v. SBI, Comp. Recovery Tribunal) detailed examination, cross-examinations, provisions of the Evidence Act as also application of other provisions of the Code of Civil Procedure like interrogatories, discoveries of documents and admission need not be gone into. Taking recourse to such proceedings would be an exception. Entire locus of the proceedings before the Debts Recovery Tribunal centres round the legally recoverable dues of the Bank.
Should we adopt the principle of purposive interpretation so as to hold that the DRT would be a Civil Court?
We have noticed hereinbefore that Civil Courts are created under different Acts. They have their own hierarchy. They necessarily are subordinate to the High Court. The appeals from their judgment will lie before the Supreme Court. The High Court is entitled to exercise its power of revision as also superintendence over the said Courts. For the aforementioned purpose, we must bear in mind the distinction between two types of Courts viz. Civil Courts and the Courts trying dispute of civil nature: Only because a Court or a Tribunal is entitled to determine an issue involving civil nature, the same by itself would not lead to the conclusion that it is a Civil Court. For the said purpose, as noticed hereinbefore a legal fiction is required to be created before it would have all attributes of a Civil Court.
The Tribunal could have been treated to be a Civil Court provided it could pass a decree and it had all the attributes of a Civil Court including undertaking of a full-fledged trial in terms of the provisions of the Code of Civil Procedure and/or the evidence Act. It is now trite law that jurisdiction of a Court must be determined having regard to the purpose and object of the Act. If Parliament, keeping in view the purpose and object thereof though, it fit to create separate Tribunal so as to enable the Banks and the financial institutions to recover the debts expeditiously where for the provisions contained in the Code of Civil Procedure as also the Evidence Act need not necessarily be resorted to, in our opinion, by taking recourse to the doctrine of purposive construction, another jurisdiction cannot be conferred upon it so as to enable this Court to transfer the case from the Civil Court to a Tribunal.
In view of the aforesaid proposition of law, it is established that the DRT is not a Civil Court and therefore the provisions of CPC do not apply to it. The case laws relied upon by Mr. Goel which are in respect of the amendment of pleadings under Order 6 Rule 17, CPC, therefore, have no application to the facts and circumstances of the present case.
In the case of Prominent Advertising v. A.B. Communications (supra) where the Court fee was not paid along with the counter-claim, the Hon'ble Single Judge of the Delhi High Court, while observing that under Order 7 Rule 11, CPC the Legislature has provided one opportunity to the party to pay the deficient Court fee in order to cure the defect, has allowed the payment of Court fee after about five years in respect of the counter-claim filed along with the written statement within time in a civil suit. However since the provisions of CPC are not applicable to the proceedings under the RDDBFI Act and Rule 7 of the Rules of 1993 does not provider any opportunity for payment of deficient fee to cure the defect on application or counter-claim, the aforesaid case also does not apply to this case.
In view of what has been stated above, I am of the considered view that the counter-claim set up by the respondent/appellant in its written statement, being not in accordance with Rule 7 of the Rules of 1993, is not a lawful and valid counterclaim as such no amendment can be permitted to the said counter-claim. I am also of the view that no cause of action had accrued to the defendant/appellant qua the amended counter-claim before the delivery of defence on 1.4.2009 and on this ground also the amended counter-claim cannot be taken on record for substituting the original counter-claim set up on the written statement. I, therefore, hold that the order impugned whereby the application (I.A. No. 438/2012) has been dismissed does not suffer with any infirmity and this appeal being devoid of force is liable to be dismissed.
The appeal is accordingly dismissed without any order as to cost. Copy of this order be furnished to the parties as per law and be also sent to the concerned DRT forthwith.